The Real Estate UNLOCKED Podcast
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The Real Estate UNLOCKED Podcast
The Fix and Flip Blueprint: Start Profiting from Real Estate Today! | Episode 19
In this episode of the Real Estate UNLOCKED Podcast, we dive into The Fix and Flip Blueprint - So you can Start Profiting from Real Estate Today! Our special guest, Brandon Harris came in dropping so many gems. Whether you're a beginner or looking to refine your skills, this episode provides the ultimate blueprint for success in house flipping!
Join us as Brandon shares his wealth of knowledge on how to get started in the fix and flip business, from choosing the right market to building a reliable team of contractors and lenders. We’ll cover essential strategies for finding and evaluating deals, estimating renovation costs, and maximizing profits on your investments. We also covered how to protect yourself on a Fix and Flip deal! You don't want to miss this one !!!!
Key topics include:
Steps to choose your market and find profitable properties
How to assemble a winning team for your flips
Tips for budgeting renovations and managing contractors
Insights on funding options and protecting your investment
Marketing strategies to sell your flipped properties quickly
Don't miss this valuable conversation packed with actionable insights that can help you turn your real estate dreams into reality!
Hit that subscribe button and join us for this informative episode!
What up everyone and welcome back to the Real Estate Unlocked podcast. I am your host, Joseph Marohn, and today we're going to be discussing one of the most lucrative ways to get into real estate investing. I'm talking about a strategic way to turn distressed properties into profitable assets, one of the most rewarding paths to building wealth while still transforming communities. Today, we're finally bringing you House Flipping, finally bringing you house flipping. House flipping, also known as fix and flip, is a real estate strategy that involves buying a property, renovating it, then selling it for a profit. This process includes identifying properties with potential, those that are undervalued or need significant repairs, and making improvements to increase its market value. It requires thorough planning, constant deal flow, a strong power team and an access to funding. Now, if house flipping is a path in real estate that sounds appealing to you, then stay tuned, because we're going to give you a step-by-step blueprint and all the secrets you need to get started on your first flip today. Now you know how we do it on the Real Estate Unlocked podcast. If we're going to do it, we got to do it right. We can't just bring on anyone to speak about fix and flips. We got to bring on Mr Fix and Flip. Today, our special guest on the podcast is Brandon Harris.
Joseph Marohn:From a young age, brandon has always been passionate about entrepreneurship. After finishing school, he launched a Facebook advertising company helping small businesses generate leads and achieve growth. A few years later, he transitioned into real estate, starting with wholesaling before expanding into full-time flipping. Over the past five years, brandon has successfully wholesaled more than 100 properties and flipped over 20 homes. In the last two years, he also focuses on creative real estate acquisitions to build out his rental portfolio. Currently, brandon is working on his first RV park deal in partnership with none other than Pace Morby. Brandon joins us today to discuss the fix and flip process, sharing his knowledge and expertise that has been the key to his continued success. Whether you're new to investing or a seasoned pro, there's a lot to learn from his experiences. So, without further ado I've been talking long enough, everyone if you will, please allow me to formally introduce to you Brandon Harris. Brandon, what up, brother? How are you doing today?
Brandon Harris:I got to practice that. Yo, yo yo. This is Brandon Harris.
Joseph Marohn:Haha What's up, brother? How's it going? What's up, man? Just another day, man, getting the day moving. Mondays is the top of my week, man. It's one of my favorite days of the week, man, get stuff done. So how's your Monday going?
Brandon Harris:Same. I couldn't agree more. Getting everything rolling, getting everything back. You never know what the next week is going to bring you New deals, new opportunities. I love it.
Joseph Marohn:Awesome, awesome. Well, brandon, welcome to the Real Estate Unlocked podcast, a place where we bring value to new and intermediate investors by bringing on guests who are extremely knowledgeable, as yourself, to cover real estate topics on a very basic level. So I've been wanting to cover fix and flips on the podcast for a while now and couldn't find the right guest to do it. So what better than a person that I call my good homie, brandon, who's active in the business and has a ton of experience with flips? So we appreciate you, brother, for dropping in to come kick it with us today.
Brandon Harris:Yeah, I appreciate that. That's cool. We're doing this with you. Who would have thought we're both in the owners club and now we're here. We're friends doing podcasts together and I'm excited to see you in boston yeah, man, I'm same here, let's go.
Joseph Marohn:Let's go, man. So what, we were up to you getting there wednesday, what day you getting there? Yeah, wednesday yeah, I got a costume here but my wife, man, she pushed me to get a costume. I'm not really big on costumes, but she's like nah, babe, we gotta, we gotta show up.
Brandon Harris:So everybody else is gonna be doing it.
Joseph Marohn:People are gonna be dressed up as alligators oh, I don't think a whole lot man, but that's smart you're coming in as a gator, or what?
Brandon Harris:no, I'm not, but I was just thinking like the themes. I bet you're gonna see some alligators yeah, that'd be pretty cool.
Joseph Marohn:I could see that, because some people are gators in the community, so maybe they come in as a gator, you know.
Brandon Harris:That's cool, or just as Pace Morby Thought about that Kind of look at the beard.
Joseph Marohn:Did you see what he posted on his channel?
Brandon Harris:He had a costume.
Joseph Marohn:Yeah, that was pretty funny. But yeah, man, so cool man. We're going to break down house flipping here in a second, but before we do that, I want to hear more of your story, brandon. How did you get into real estate, like, why did you choose to flip houses and what were you doing prior to all this?
Brandon Harris:Yeah, so entrepreneurship, that was always something that I was interested in, to the point where, even when I was in college, I decided to change my major to it, joined the clubs, got everything involved. Just how I got introduced to that is I actually. I just finished. Uh, you know, I went to college to play a sport, to wrestle. Um, I decided I no longer want to do that. I found myself with a lot of time in my hands, um, and I was trying to figure out you know what's the next step? I was used to having all this time filled with practices, tournaments, camps, all kind of stuff. So I was like you know, I got all this time on my hands. What do I do next? I joined fraternity. I didn't want to do that, and so, with my brother he was graduating, he's looking for a job I was like, okay, that's the next step here. I want to learn how to make money, and so I got a factory. With that, I started doing some research, looking online.
Brandon Harris:Long story short, I come across this audio tape called the strangest secret by earl nightingale, just like one of the og tapes, um, and he talks about, like, the whole thought process behind success and how it starts in the mind. And you know, one of his famous quotes is the problem with people today they simply do not think. And that's what he wanted to talk about. And so I started to think and I came across. The next book I read was Think and Grow Rich, and so slowly. And this is important, because what started to happen was that my perspective, my paradigm, it started to slowly change and I started to just get introduced to these new concepts, that kind of you know. I started thinking like, hey, you know. I started thinking like, hey, I, you know, I have the power to really determine what my life is going to look like. Um, the mind is a very powerful thing and I can control that and become aware and conscious of that. Then I can create this beautiful reality.
Brandon Harris:And when I realized that, I got really excited. I told my roommate, I told my roommate start listening to it. Like 10 minutes 30. He said this is boring, turn it off. And I told my own dale says he says this will only hit one out of 100 people. Yes, I'm like, okay, cool, um, I must just be one of those people which you know, I.
Brandon Harris:I think that's simply because some people are so they're so far gone. Either they've already been told things too many times where when you get introduced to these concepts they don't believe it, or they've just simply settled and they don't want to go get uncomfortable again. And so I was okay with getting uncomfortable, I was okay with becoming one of the hardest workers in the room and all that kind of stuff, and so I just started to study these people and try to recognize patterns, and so one of the patterns that I realized is that a lot of these people, they went out, they studied other people, they they found something they're passionate about. They wouldn't create, they innovated, um, and they went and built their own businesses, companies, um, and so that's kind of the path I started to go down. Um, I decided, okay, yeah, and then the whole, you know, not wanting to work a nine to five, not wanting to work 40 years, retiring four percent of safety, social security, um, relying on the government, uh, which is the last thing I would ever want to do, right, and uh, you know, just falling into this, the system, which I was already in the system. We're all kind of bored into the system. I was in the school system, um, and I didn't want to go just get a degree, graduate, find a job and get comfortable with that, even if some things aren't going right and it's hard. You know you gotta go for another job and some people, you know, do it. My brother, he's gone that path and he's ambitious. He brings that ambitious to what he does in sales and he's done really good.
Brandon Harris:But I wanted to go create for myself and so at that time, um, you know, I was also studying marketing. I thought marketing was really interesting because all the things that were going on with social media um, this was like 2012, 2014 so even instagram, facebook, all this kind of stuff was coming new. Um, basic advertising was brand new. No one knew about that. You were still talking about when you wanted to, you know, when you wanted to people to find your business. It's websites, websites, radio, ads, you know really additional forms of marketing, billboards, even TV. It was still traditional. This was just 10 years ago. It's crazy Traditional forms of marketing. And so that's where I thought that there is going to be a huge room for someone, for people to come into and, you know, start helping people generate leads through things like Instagram, facebook advertising.
Brandon Harris:And so I chose Facebook advertising just because I had met someone at the time. His name is Paulson Thomas Paulson, if you ever hear this. Thank you so much. He was one of my first mentors and he just really started to help me see things I hadn't seen before and also taught me technical skills. So it was, you know, I was reading those books still and getting to mind, you know, self-development all that kind of stuff is great.
Brandon Harris:Now I found, like a technical mentor, someone who was teaching me something within a certain field, who was already there, already doing it, already had clients, already had the systems and processes down, and so he started to teach me how to run advertisements for companies via facebook, um, and so that's why I decided to, and I did that. I was working with chiropractors, dentists um, actually, I had a hair salon too. One thing I learned that he helped me, he taught me, was to niche down, um, and so that was like a huge lesson. So. So as I started to narrow it down, I started working with chiropractors, and you know some of these doctors, practices that you know I could actually talk to the doctor will be easier access. So I started working with them. I was just helping generate leads, and I had a buddy at the time and he started working with another guy who was doing this thing called wholesaling.
Brandon Harris:And that time it wasn't. You know, there wasn't TikTok around, it was all over the place. I had never heard of it. I thought that in order to get involved with real estate, you had to either have a lot of money, or you could buy investment properties, or you had to be a realtor, which I had no interest in being at any point. And so when I had heard about wholesaling, it was a new concept to me and you know he told me about it, and then I saw him do a few deals. I thought it was extremely interesting. You know, I kind of saw that it was kind of a merged marketing with real estate. Essentially, you're selling a contract, you've got a market to find people who want to sign this contract, then you've got to go find a buyer for it, and so it just clicked for me and I saw a lot of potential there and I just felt this bowl of energy and so I was like, you know, this is what I want to do and I transitioned full, full time into wholesaling.
Joseph Marohn:Yeah, it's awesome, man, cause you, you touched on a good point, right, because a lot of people, you know, they they see real estate ads or they they hear about real estate seminars and they think like, oh man, all that stuff's a scam, like don't go to those events, you know, and there is a lot of people out there that are running scams and stuff. But if you're lucky enough, you can find the right mentor. As you just pointed out, you found a good mentor and it's really just really excelled you and created this path for you. Now you're full-time transition to real estate, right?
Joseph Marohn:Um, you know, we're we're blessed to find someone like Pace Morby, right, that's really kind of taken us under his wing and showed us a lot of things that you know, a lot of people aren't really talking about, and and to the point where it's like when I talk to family members about it, they're just like you know, what kind of community is this? Like you guys are just going to Boston to go trick or treating, like what's going on here, you know? But, um, yeah, man. And then you touched on a lot of good. You know good books, like you know, think and grow rich. That's a classic, you know, and it really just sparks that interest to get into real estate. But yeah man, good stuff right there, um good point.
Brandon Harris:One point that you made I got to point it out is I'm actually glad that at that point I didn't find Pace Morby. Now I say that with you know, let me explain Number one best mentorship program I've ever been a part of, by far and large, and he'll even tell you some self I'm about to touch on. But when I say that, what I mean is that I found him at that point, I think that I would. It would have took me a little bit longer to get deals done, just knowing the person that I was like I, when I said that different marketing channels where, that's where one thing my mentor taught me was to find one, you know, work with just chiropractors instead of working with all these different businesses. And so that's one thing that when I got into it, I knew that. I knew this concept already and I was like okay, I know, I've been able to collect enough information. I got a buy list, I'm going to just call, I'm going to get a dialer, I'm going to get a CRM and that's going to be my business. And I just did that, I just started doing that.
Brandon Harris:Versus, when I talk to people who are struggling, it's like they're doing all these things. They're learning all these things they're doing. They're wholesaling, they're learning all these things. They're doing, they're wholesaling. They're doing sub two. They're doing all these different things within it. They're greater lending, they're all this stuff and they're not, but they're not doing anything. And I forgot what they call that. It's like shiny shiny objects.
Brandon Harris:We're just look at that too. But also, just sitting there and you feel good, you get your cup of coffee, you're like, okay, I'm going to go get on the zoom at this time, this time, this, you know, you just sit there and you're learning and you feel like you're being productive, but you're not doing anything to actually make you money. Um, and so what I did was I went and took action, and then the first thing I did when I made money was I bought a mentorship program. Um, but before that it was all just action. They're very limited time and learning it's not too complicated.
Joseph Marohn:You just got to do it, yeah, and you touched on a good point, right, because there's so much content and so much different topics and ways you can get into real estate that they cover in the mentorship that it's real easy to get sidetracked right when you feel like you're doing something but you're actually just spinning your wheels instead of just really niching down on one thing and sticking to that and trying it out for like six months and see if you can find any traction.
Joseph Marohn:If you don't, then you can always change to something else. But you know, like when you talk about wholesaling, you know there's just so many different ways you can make money in the real estate, right, you can. You know new development, you know there's fixing flips, there's all these different ways, but you can't do them all right, you got to really niche down on one, and that's a good point that you bring up. So which bring us to? You know why? What we're talking about here is fixing flips. So I know I touched a little bit on it on the intro, but can you explain what house flipping is for those who may not be too familiar with the term?
Brandon Harris:absolutely. Um. So you're taking a house and you're renovating it, you're making improvements to the house. In most cases, actually, a lot of houses where I've just simply bought the house, put it back in the market and in fact, one of my favorite flips is when all you're doing is getting a junk removal crew made depends if it's too far gone past or not lawn care, landscaping and photographer. Those are good flips. It really depends on the house. But in general a fix and flip is you're buying a house that's in need of some work. You're going in, you're improving the house, you're bringing it up to the 2024 HGTV standards a lot of fix and flippers like to say but you're improving the house, like all the TV shows. You're fixing and flipping it and then you're putting it back on the market for the end buyer, for someone to come purchase the property. So you're buying it from someone. Maybe, whatever the situation is, the house is in need of repair. You repair the house, you put it back in the market and you sell the house.
Joseph Marohn:So where should a beginner start? If they want to get into fixing and flipping today, what are the first steps that you would say that they should start taking?
Brandon Harris:My first steps were I wholesaled first, and I thought that was a great way to get into it, because with wholesaling you're not, there's a lot less risk, you're not actually bringing money to the table in most cases, maybe a little bit earnest money, you know, whatever, but there's a lot less risk involved and that way you can kind of learn the ins and the outs, um, you know, learn a little bit more about how it works and like the basic things. Like I didn't know what arv was, I didn't know a single thing and I still don't know much. I mean, people ask me. One of the questions they always ask me is like like always, this is always general public a lot of people they always ask me like, so do you, like actually do the work yourself? Um, and so what I would say is I still can't hammer and a nail it's a common question, though, yeah yeah, I'm not handy when I I can't, you know I'm.
Brandon Harris:I design. I don't like design, um, I you know I'm not handy, but I like business, like building businesses, and I like numbers, I like making money, um, and I and I like negotiations and like sales, and I think those are the more important parts. So, to kind of take a couple steps back with that, you want to get into the fix and flipping, start off with wholesaling. That's a great way. But if you're going to go into it either way, the first thing I would learn is learning how to underwrite a house. It's the most important part. You have to understand what the numbers look like, because you can very quickly lose money and you don't want to do that. So you're going to have to understand what some basic terms mean, like ARV after repair value. So you're buying a house for whatever amount of money. You got to figure out what it can sell for after you've paired it. Then, between that, you got to factor in things like your loan costs, your, your actual renovations, supply and labor, and then your closing costs, both on the buying side and selling side, and so you have to be able to underwrite a deal, and so there's a lot of different people and different ways. You can go on and learn that, but the first thing I would get down is okay, what even makes a deal? And then, number two, you have to learn how to find the deal From there.
Brandon Harris:I truly believe that if you understand what makes a good deal and you have the ability to find a good deal, the rest is a little bit easier. A lot easier because when you have a good deal partners, bring on a partner. That's what I would say. First off, just bring on someone who knows what they're doing, say, hey, look at this great deal I have, do you want to partner on it? And most likely they're going to say yes, if it's a great deal. And that way, what you can learn from that is you can learn like so I'm doing a deal with Pace.
Brandon Harris:This is a big RV park deal and it's a deal that you know I'm excited about. Numbers are great, and so what I did since my first RV park deal is I went and found out someone with information and the knowledge that I don't have, and part of our agreement as we do this is I want to be in on those calls with the team, with the management team. I want to understand what they're looking at, how they think and how they do things. And then there's things that come with that the softwares they use, payment, soft, all the stuff that goes into it. I'm going to write that down, I'm going to keep that information and they're more than happy to share it with me because we're partners and so they're teaching me the processes.
Brandon Harris:I brought a great deal to the table and we have a partnership and then going in the future you know I may use them a few more times we may have ways to venture out in our partnership, but usually what happens is that you'll come in partner with someone and then, when you get comfortable on doing your own, then you can do it on your own. Get comfortable on doing your own, then you can do it on your own. So I think that's the best way to do it Learn how to underwrite a deal, learn how to find deals and then find a partner when you found a deal.
Joseph Marohn:Yeah, you touched on so many great points. I think a lot of people make the mistake by coming in this thing wanting the whole piece of the pie, right, like they're not willing to JV, they're not willing to partner, and and you're really holding yourself back, right, because, like you said, like you know, you don't have a whole lot of experience. You know someone about RV parks, but you don't have the expertise as someone like Pace Morbier it doesn't even have to be Pace, right, it could be anybody that's in that space and you bring the deal with them, you partner up on them, and then they can really show you how it all unfolds, and then you guys can work together. Now you can take that blueprint and go and do it yourself where you don't have to partner with him. And that's how I always tell people too when they get into wholesaling right, like, yeah, you can get into the acquisition side, you master that. But then now you still have to dispo the deal, right, it's not a deal until you actually close on it. And so one of the good ways is, you know, like you know, link up JV with someone that's in disposition, and then you could just split the proceedings and then he'll show you the process of how to find that end buyer Right.
Joseph Marohn:And then you know you did talk about how you know you started out with wholesaling Right and a lot of people you know that's how a lot of people start in real estate. They started in wholesaling and one of the first questions a lot of people ask me is like where do I market at? Like, where, how do I choose the market? Like I hear about Texas, I hear about California, you know all these different States. Like I'm so confused on where to start. So, with that being said, like, how did you determine which market you wanted to focus on first for your flips?
Brandon Harris:Well, um, it's definitely going to differ case by case, because my market is North Carolina. Everyone wants to be in North Carolina. It's a good market. It's a strong market, so that may impact someone's decision, but my decision was that I wanted to be in your backyard, I wanted to be close, I wanted to be somewhere where I knew the areas. I knew the good areas and the bad areas, and my market just happened to be really good. You know, started off.
Brandon Harris:I grew up in Raleigh. It's where I started my business, so I was in one of the best markets, and that actually would scare a lot of people too, though you can look at it both ways. I might be fortunate enough to know one of the better markets is my backyard, but also it scares a lot of people who don't want to deal with competition. They don't want to go in and compete with New Western, these big companies who just dominate, and what I would say with that is I think that's a scarcity mindset. I think that you just got to get better. But I also understand that there are other opportunities elsewhere. So you may have your own reasons. You may be finding a market where there's less competition. You can figure it out. I mean that's great and everything.
Brandon Harris:But for me I wasn't going to be afraid of the market because there's the players in it. I knew that if I could find a deal in that market it was going to make my life a lot easier on the back end when I sold the house. So I wanted to go after that market. So ideally I would tell anyone okay, I was getting started to start off in their market, unless if they're in some place the population is really low, like under 20,000 or whatever, and there's just something going on where it's just a hard area.
Brandon Harris:You know if you can go in and you can look and you can see and there's ways to do this and not going to go into too much detail here. But essentially when you understand this concept, you look at Zillow and you're able to determine if houses are moving, if they're selling on time, how many are for sale, how many are under contract, how many have been sold. You kind of come up with a way of figuring out if it's a good, healthy market. I would always start by looking in your backyard first, and if your backyard doesn't work, then look at the next closest location and if that doesn't work, then pick a market.
Joseph Marohn:Yeah, I used to have that mindset. I used to be like man, I don't want to be where everybody else is at, right, I don't want to be next to the competition. They're just going to take all the deals. But if you really sit back and think about it, that's where all the activity is right. You know, like McDonald's, they're going to go and put their. You know our Burger King, they're going to put no, they want to be next to the competition. That's where all the activity is. If you go and choose, like how you just mentioned, like a market that there's not much population, not a lot of activity, chances of you finding a buyer is going to be slim. So, on top of that, it makes you elevate your game. Right, because if somebody is crushing it, you're like dude, how do I step my game up? How do I improve where I can close deals, just like them. So you don't do any deals outside of your own market.
Brandon Harris:No, I do, that's how I started. But yeah, I mean since, yeah, we've done deals all up and down the East Coast. I've done some random areas, kind of just came across my plate, but yeah, we do it all across North Carolina, south Carolina, virginia. We've done some in Florida.
Joseph Marohn:Okay, so like what would you say like the main factors to consider when deciding between a local market versus a virtual one?
Brandon Harris:Um, well, I think again, if you can go and you can kind of start to analyze how many houses I've sold, and I really it's relative to to the market. You know the market is is changing, like we've had a very volatile market the past five years, so like there were times up here where I didn't want to look more than 90 days past. Um, you know, like if interest rates massive shift, like that can impact it. But general rule of thumb, I look at like six months. I use Zillow. I look at past six months how many houses have sold. Then I go and I look at how many houses are for sale. Then I also look at how many houses are in their contract that are for sale. So those are kind of three things to look at.
Brandon Harris:Um, if you look and you see a market, for instance, that for instance it's had like, let's say, the last 90 days, let's say it's had two I'm just throwing numbers out there let's say 200 have sold and you look at it right now and there's 200 for sale, I would be a major red flag. I'm right, past 90 days, only 200 sold. Right now you have 200 sale. And what if, even out those 200, there's only like 500 contract right now what does?
Brandon Harris:that tell you that's how that? Number one, they're moving slow, the same amount of solar are for sale. And number two, it tells me there's 200 for sale, only 500 contract. That means that they're sitting in the market. So what's going to happen when you go get a house and try to sell it?
Brandon Harris:it's probably the same thing. There's a lot of opportunity out there. There's a lot of other houses that can be purchased. So unless you're able to get the price the property's prices for really low, for really good prices, which you may be able to do, it's probably gonna be pretty hard to sell that house. So I would go try to find an opportunity where you see not enough supply in a market.
Joseph Marohn:All right, yeah, and I and I agree with you on that you know, like choosing your own, choosing your market as your own backyard, starting off there, I think is is going to be key, especially when it comes to flips, right Cause then you can go in and check on your contractors. You got boots on the ground, you can go and see visuals. So I would say, yeah, I agree with you on that one. You know, if you're doing wholesaling, it's it's a little bit different, right, you can virtually wholesale. It's a little bit easier than it is to flip in your own backyard. But, yeah, I agree with you. So we have our market right. Let's say we have our market in mind, we're going to choose our backyard. Now, what would be someone's next step? Are they building a power team? Do they start looking for deals? Am I hitting on wholesalers? What's the next step? Well, here's one thing about.
Brandon Harris:Let's say you can't choose your backyard for whatever reason, it's not a good market. It let's say you can't choose your backyard for whatever reason, it's not a good market, it's horrible, whatever. If that's the case, then here's a tip that I've learned Find some other partner, in this case, real estate agents are a great partner here. Work something out with them, with them. Now you know I was negotiating a deal where I don't pay with something A normal seller would pay, and I look for someone who has experience with flips. They have to have experience with flips. They have to have flipped their own houses. This is one of the best partners ever.
Brandon Harris:Number one you're not having to do like a 50-50 equity. I mean, it's like you're paying an agent, brokerage agent usually say 3% for the listing firm, especially if you work on a deal with them. Saying hey, listen, I already know how to negotiate, you don't have to do much of that. Saying hey, listen, I already know how to negotiate, you don't have to do much of that. The paperwork's easy. This house is going to be brand new. I'm going to have multiple of these coming and you can be my guy for all of these.
Brandon Harris:Let's do half, let's do what I do, but then what they can bring to the table is so invaluable. Number one they can go and they can do walkthroughs for you. They can check on the property. Number two they can share their contacts contractors that's going to be the most important thing here. So they've already done flips, they already have contractors and they've already vetted them. So that's just such a good. You know you want to find. One of the best partners you can find is find a flipping agent, an agent who has flipped houses. So that's number one. So next, but let's say, for whatever reason, that's not the route you go, cause that's not the route that I went at first. But let's say so you have your market and we're at the point where you have a house under contract or what.
Joseph Marohn:So like, would you say, like building up a team would be first, or would you say, just go out and finding a deal?
Brandon Harris:Well, yeah, deal, don't waste your team trying to build time building, finding a team, building a team? Um, not yet. I mean definitely not. I like to have them? Yeah, definitely not. And when I?
Joseph Marohn:and when I say let me correct myself when I say team, I meant like more of a power team. So, like you mentioned, an agent, you know, maybe finding title company, maybe start looking for contractors. Do you think that's important to do first, to establish first? Or would you say just go out and start looking for deals, then start building out your power team? It?
Brandon Harris:depends. If you are like where I was, I was a wholesaler that transitioned into flipping. I got tired. I was one of those wholesalers that would go back and I'd be like whatever happened to that house, let me just look it up real quick. What did they sell it for? I'd see what they sold it for and then a lot of times I was like no way that mofo gave me so much trouble for my asking price and top or down he just made what Like $100,000 on it. That happened too many times where I go back and I look at it and I would see a lot of money that was left on the table. And so that pain point turned into motivation, where I was like you know what? I'm going to suck this up, I'm going to learn this.
Brandon Harris:Tired of the mindset of thinking like, hey, maybe I should just focus on just doing this and not put time and effort into doing this, which is the shiny objects thing you kind of talk about. But these things integrate so well like you're already halfway there with your wholesaling. You found the deal. That's the most important part. You have found the deal. The numbers make sense, congratulations. You have a good deal. No one's going to ever argue, with that being the most important part, because you found a killer deal, a lot of the rest can just fall into place. You can just find a partner that has all the experience, knowledge, and they will partner with you. And if they don't want to do it, someone else who has all the knowledge, experience, will partner with you. So finding the deal is absolutely the most important part. So if you're a wholesaler, cherry pick your deals, um. But if you're, if we're talking about someone who has, like no experience doing this whatsoever, um, then I would go find wholesalers and I would just, instead of trying to build a team and going, I mean, sure, maybe you can find some agents. I've personally never been the person that buys on-market houses. Some people do great with that. I just like negotiating directly with a seller and I probably will do it in the future, but I haven't been the person that buys the on-market houses. I do all off-market. So what I would say is I would say go find wholesalers and don't just tell them hey, add me to your list and tell me about the best deals you have and make sure that I'm first, Because people actually do say that and it's kind of comical.
Brandon Harris:First of all, half of wholesalers are lazy, probably more than half, probably 80 to 90% of wholesalers are lazy, unprofessional, not business owners. They don't know how to organize their time. They don't know how to do things properly, they don't have systems that are proper, and so half the time, or more than that, when you tell them, hey, here's my email, so great, they put it into like a note or whatever on their phone. They don't actually ever add it to their email system. Right, that's what happens all the time. Why do I know that? Because I did that a lot of times. First year I got really well emails. My email system wasn't working whatever. I didn't do that.
Brandon Harris:The guy who was the guy who got most of my deals, the way he operated and I learned a lot from how he operated was he got my phone number and he called me and when he knew I was hot, he knew I was putting out deals. I heard from him a lot. He built great rapport with me. He was cool. He wasn't just the person who's like throw me on your list, um, and then gets upset, you know. And then on top of that, he was really easy to work with.
Brandon Harris:So to kind of just summarize all that and kind of how it can be useful is find wholesalers, get their phone numbers, actually interact with them. Don't just expect them to throw you on a buyer's list. And, by the way, even if they do throw you on the buyer's list, you're having to compete with everyone else that's on their buyer's list. So now they're a good enough wholesaler I think I just went off for a second Now they're a good enough wholesaler where they actually are putting you on their buyer's list, putting everyone else on the buyer's list too, so they're competing with them. Get their numbers, no matter what.
Brandon Harris:Get their numbers, interact with them, contact them, make them like you and then ask them for deals, get sent your way and when they do send them or you follow up, say hey, do you have anything? Or do you like hey, here's a good line. Hey, do you have anything available to purchase right now? Oh, no, I don't have anything. Cool, you got anything in the pipeline?
Brandon Harris:Oh, you know, I am kind of working on this and, by the way, a lot of wholesalers they want to feel like they're they're good at this, so they're gonna tell you like, oh, they're gonna tell you what they're doing. They're working on saying okay, when do you think that's gonna come through, and then follow up on that deal and then be ready. Be ready to buy. Don't be difficult. The last thing a wholesaler want is someone is hey, can I see, can I touch, can I feel the property? Can I walk it three times? Can I make sure you sure this is good? Can I talk? No, the buyer who's get the most deals is going to be the person that knows what they want and is ready to close. So this guy will talk about.
Brandon Harris:This is what he sounds like on the phone what you got. Okay, do you see that to me? Let me look at it real quick and within two minutes. Okay, I'll take it how much? What's the best you can do? And then he's getting a contract in there before he has to see the house. You can be that person which I know. It's hard. You want to feel it, you want to touch it, you want to do all those things. I understand that. But if you can be so prepared that you're ready to close a deal on the phone, it's going to increase your odds of getting that deal.
Joseph Marohn:Yeah, I like the fact that you said build rapport right, instead of just sending a text message or an email blast. I can't tell you how many times I get people reaching out like that and it's I hate it, man. I really I'm a firm believer in getting on the phone or getting in front of somebody and just having a real conversation and building some actual rapport there, right? So like, let's say, a wholesaler came to you and said yo, brandon, I want to bring some opportunities your way. What's that conversation look like? Is there like any specific bed bath count that you're shooting for, maybe a certain square footage? What are you telling that wholesaler?
Brandon Harris:Yeah, so I just have in my notes it's kind of a template I just send out and kind of give them an idea to tell you I don't try to be too specific, but you want to be specific enough where you're not getting all the trash deals, but also you don't want to be too specific where you may get passed upon some deals and I don't want to make it too complicated for that person. Like, are they really going to go? How many wholesalers really have their CRMs built out where they're like okay, this person only needs this year, this year, this county, this year, blah, blah, blah, blah, blah. It's like they're not. Not.
Brandon Harris:Most wholesalers don't actually have a system. That's good, that is that good. And so you're trying to explain to them this whole buy box and you're dealing with a wholesaler who probably doesn't have the best systems, just the majority. Just because some people are fantastic, really organized, have great teams, I get that. But best wholesal, those are usually the newer ones that don't have huge buyers lists, um, so they're probably not gonna have super built out stuff.
Brandon Harris:So if you send them this super fine and detailed buyer's box, I mean, first of all, it's probably not gonna even get inputted like that, um, second of all, it just may just cancel you out altogether.
Brandon Harris:So I just try to be kind of vague and they like, honestly, send me any deals you want. Really, like I can look at a deal and at least in the first 10 seconds know if it's going into my trash bin or if I need to look at it longer, so like how much, like it takes literally 10 seconds to do that. So they can send me whatever they want and I can tell within 10 seconds if I'm looking to it more and then if I decide then then I can do a deeper analysis of that deal. So, be very vague, I kind of just tell them the areas that I'm looking for, but you can just send me anything, because you never know. I've had someone send me a deal in Newport, ritchie, florida. That was such a good deal that I was on my bias box. I bought it and made a good amount of money.
Joseph Marohn:Cool. And then so I know you kind of touched on, you know, finding deals from wholesalers but like what are some other like effective strategies someone can do, or like something you've learned over the years for finding the right properties to flip Like, do you mind sharing where you typically find your best deals?
Brandon Harris:Yeah, I mean, for me, the most consistent, best deal producing marketing channel that I've had is the calling system. And there's more to you know cold call is more that goes into that. There's different layers to it, but you know it's buying a list. We have a VA first. They call and they just try to. You know, even one to two positive conversations a day is good and they channel that into our CRM. And then that's where our lead acquisition, that's where you know this would be you, this would be you, this person.
Brandon Harris:So, for deals, this is where you then talk to those leads. So if you can go on Upwork 5 or wherever you find VAs, pay someone four to five bucks an hour, have them call through the list and generate leads. Or if you really want to save the money on that, do that yourself. If you can pay for a VA, pay for a VA. But if you can't do that yourself, generate those leads, have those conversations.
Brandon Harris:And then the second half of it is way more important.
Brandon Harris:So then it's the schedule and the follow-up. So that's where the real pipeline starts to get built and it's about just continuously following up, taking notes, remembering what's going on, because it's very unlikely that you're going to call someone or then in there they're ready to go and it does happen in the best deals ever but more than likely you've got to tend to that. You gotta you gotta talk to them. You gotta follow up on the dates because it could be months out from when they're actually ready and a lot of this is about timing. So I mean it's the most important thing is timing in this business is talking to the person at that specific time when they've just either had enough or whatever's going on, got to the point where they need to sell.
Brandon Harris:Those were all my best deals have came from from. Most of my deals come from this, just like, for whatever reason, they've had a bunch of people talking to them and, sure, maybe they like me a little bit more, maybe not, um, but the more important part is that I got in touch with them at that right time and I closed the deal at that time. And so, having those touch points, making sure you're talking to them, and then you're going in for the close.
Joseph Marohn:So what list are you pulling? What kind of criteria?
Brandon Harris:So for me, I've never really been very like specific and stack my list Like the more important thing to me for cash deals was equity, is that they have higher equity. Now, if you have a smaller team, you only have you know, especially you're doing the calls yourself. I think a great place to start would be pre foreclosureosure someone with actual, real motivation for selling your then and there, a solution that you can offer to someone who has a problem. Um, those are some of the best lists. Um, you know all the different categories of lists. You obviously you have divorce, you have the pre-foreclosure, you have high equity, you have um tax liens, tax delinquent liens, and you got these different ones For me I just kind of bought them all.
Joseph Marohn:Okay. So you kind of just bought a larger list and just started hitting them all with VAs and whatnot and VAs are great. I've actually used VAs. The thing is that you still have to train them. A lot of people don't realize that they think they're just going to hire a VA and then they got this full on badass assistant. You got to remember you are paying these people a lower wage and there is some training involved and we've actually covered that in the podcast. So you know, if you guys want to learn how to hire VAs and train them properly, you can look back on some previous episodes and I've actually brought on the owner of VA Depot and we've touched on a lot of good points on how to properly train them.
Joseph Marohn:But let's okay. So how do you evaluate a potential deal and determine if it's even worth pursuing? Like, is there a certain level of wear and tear in the properties it's got to be at, or you know maybe a timeline on when the property was built? Like, what are those key factors where you're like okay, this is a deal, let's try to work this one out?
Brandon Harris:Yeah, I really don't like early old houses. I don't like when I have to go in and change the entire plumbing systems or if I'm dealing with foundation issues, like I'm not trying to do that because it's really hard to estimate, estimate exactly how much it's going to cost. Um, I guess in your perfect world, um, the perfect flip is gonna be like 1980 or newer three bed, two bath brick ranch house, um, somewhere in the purchase price of like 100 to like 250 max. Um, the reason behind that is that, and also not too big, not too much acreage. So so I really want over 2000 square feet and really like not over half an acre, I mean a little more of that. Really like over an acre is ideal, just because then you got landscaping costs and all that that kind of goes into it. That doesn't really like. Yeah, sure, you may have some niche buyers are like I'm only buying it if it has two acres or more, and sure Like, great, like that. Um, and sure like, great, like that, there are some people like that and they'll pay those houses. But like, that's not who I'm going after. I'm going after the, the larger market I want where there's going to be a bigger buyer pool. So you know you want it to be not too expensive. You want it to be in that kind of perfect price range where, like almost like a new home buyer. Um, because that's where the biggest market is and so I want to be in that market.
Brandon Harris:Brick, because brick is number one. It looks great, it's usually a lot less issues. Go on the outside, clean it up, paint it. It looks fantastic. A ranch again, just for that buyer pool. You're going to have a bigger buyer pool with a ranch and a little less issues to deal with. Um, and newer, obviously for those reasons I touched on. So if you can find a house that's 1980 or new, but then it too new probably is, you know, kind of the point where you gotta change up your offer, um, because it's gonna depend how much work needs to be done to it. Um, you're maybe not be able to find as many opportunities with houses that need a lot of work, but like 1980 or newer brick ranch.
Brandon Harris:Three bed, two bath. Two bath is always going to be huge. It doesn't really matter. If you like four bed, three bed, I actually prefer three beds. Probably more space in the house, um, more open, uh, uh, more open plan versus having, like all these extra bedrooms. Um, but yeah, for fix and flip, that's going to be ideal. If you're doing like your first one, I would say, definitely try to stay like at that 1980 or newer. Um, you just don't want to open up a can of worms, right? But so here's the main thing that I learned. So this house that I'm in right now actually, um, this was my first flip. Actually it wasn't a flip, but it's the first house I renovated. It wasn't going to be an Airbnb, it's in Wilmington, got it for a great deal on creative terms and I spent $140,000 renovating this 1,700-square-foot house $140,000. No new HVAC, no new roof. Frickin' popcorn is still on the ceiling. Learning experience for sure. Knowing what I know now, it would have cost me probably about $60,000 and would have been a much better job.
Joseph Marohn:So yeah, why was that? What do you think that was?
Brandon Harris:Yeah, that's what I'm going to touch base on. If I had known this one thing, just this one one thing, if I hadn't been lazy and I knew this one thing would have changed everything for me. Okay, that one thing is get multiple quotes. Three to five quotes. Get five your first time. Get five, you'll learn a lot more. Pick up the phone, don't be lazy. Take a picture of that van going by. I like the vans that are something like gonzalez or whatever, landscaping or painting, um, those are the type of vans that I usually try to target. I take pictures of those vans, um, and I get multiple quotes.
Brandon Harris:Because when some freaking jerk comes and tells you that, hey, man, we gotta do this, this and this and this and this and this, and like, you're like, oh, okay, what's that gonna cost? He's like, oh, it's only gonna be like ten thousand dollars. You're like, okay, is that that's normal, right? Yeah, okay, cool, that's what we have to do. So I bought the house. What you gotta do? Instead, you got someone else. So and it's like oh, man, like I can just replace one thing. It's like a five hundred dollar fix. And you're like what? So then you go back to that person again this person's like. He's like oh yeah, well, I don't know if you want to, I guess you don't have to replace it. And you know right away that that guy, that that person is trying to rip you, he's trying to screw you, and so get multiple quotes and then pin them up against each other. So first weed out the people that are just going to rip you off and then pin up the other guys. I mean, you don't have to do this part if you're happy to quote. But what I would do is I would pin the quotes together. I would say, hey, listen, this person said they'll do this, make them, make sure they give you a price sheet, everything they're going to give. So this person says they're going to do this for this. This person said they're going to do this and this. What can you do? And then get that price to the point where you feel comfortable. And then you get another quote and see it, and if you're at like five quotes and you're kind of understanding now what they're doing, what they're going to do, that's how you can kind of do something without even having that much knowledge of what exactly it is. They'll come into your house and they'll tell you everything that needs to be done. This is what they do, and so then you get that price and quote it out. Now you have a really good idea of what it's going to cost.
Brandon Harris:I always pay for the material myself. I do that. I just use Home Depot. Some people try to source different things and import and whatever it's too much work. Where you do multiple flips, I use Home Depot. They got great prices anyways, I use Home Depot and I have a credit card with them.
Brandon Harris:You don't have to have a credit card with them, but you can set up a profile, a home depot pro account, where all they do is text you whenever you approve an order. That's what I do. I text one and I approve it. So I buy the material. So there's no funny business going on the material. Um, I buy the material. It comes from home depot. It's not coming from some previous project they had or who knows what, where they're finding this material. I buy, buy the material and then from there, I mean you've you now you know I have your quotes, you have your people, you're buying the material. Then, when they're going to want you to pay for part of it, pay them. I give them like let's say like I just had one thing and the total project was like $30,000. So I started off with $10,000. I trust this guy. I know them. You can do less than that. You can have them start. It's all what you negotiate. You don't get what's fair in life. You get what you negotiate. That's a great point you don't get what's fair.
Brandon Harris:You get what you negotiate. A lot of times, if you don't negotiate, you're 100% not going to get what's fair. So if you want to get good deals and you want things to go right, it's going to be what you negotiate. So if it were me and I was starting off just with that, like I wish I did with that first crew it was my first flip. I started with my first crew. I mean I would give them pennies on the dollar because I'd be worried about this crew. I'd always be concerned that maybe someone's going to try to screw you, and so I would start off with like maybe $1,000, listen, we haven't worked together. I got jobs for you. I got a lot of work for you. Always tell them that because you do and you could be a great potential client for them. I got tons of work for you coming up. I need to build a trust relationship with you. I'm going to give you $1,000 and then we can do payments as you complete work. That's it.
Brandon Harris:And then if they need to finish something, if they're having issues with them finishing something, say Joseph, look it, man. You said you'd do this, do this job, and we're all good. I got tons of houses coming. I got 200 contracts. Dude, we're going to get busy. Man, I'm going to keep you rolling.
Brandon Harris:You're going to be my guy, or don't do this, and fine, we're going to split up. You're going to have to go find someone else get. Just fix that one thing. They're going to split up, but they're going to, they're going to do it. And then, once you get to the point where you do have enough work for them, that's the most beautiful point ever, because now they work for you, they're going to, you can keep them busy enough to where they'll be. You don't have to go find other crews and do all this stuff. They start to understanding I use the same stuff for all my flips so they all look the same. And so this way, everything's like cookie cutter same crew, same material, same stuff. I switch it up maybe by two or three different varieties. Um, it's, everything's in shopping folders.
Joseph Marohn:It takes me two to three hours to do a flip man, I hope, I hope you guys really wrote that down, because what he just said right now was a gym. Right, getting multiple bids, at least three. You said right and was a gym right.
Joseph Marohn:Getting multiple bids at least three, you said right, and that could have saved you $80,000. So imagine if you're constantly doing this business and you're constantly doing flips. Look how much that can actually add up. 80 grand is a lot of money. So I love that you pointed that out, because you definitely want to get multiple bids.
Brandon Harris:And you learn a lot talking to different people, because you have to go and go like, and you start hearing different things. They're saying, they're showing you stuff. Just get as many quotes as you can okay.
Joseph Marohn:So now how do I know I had the right contractor, like? How do I know I can even trust these guys like and they just don't go running off my money? I know you said you mentioned about giving them a thousand dollars at a time, but is there any type of like uh agreement we can have them sign to protect ourselves or do?
Brandon Harris:OK, you can have a contract, but you know, and that's kind of like just like some of these agreements you sign with anything, it's like it may just be a scare tactic or you could have some ironclad that some of these people, you know, I'm not hiring GCs. I don't hire GCs unless it's something it's like permits or need. I don't hire GCs. They're more expensive. I don't hire GCs unless it's something it's like permits are neat. I don't hire GCs. They're more expensive. I don't. That's not how I do it. And so you know, some of these people maybe they could run off and take my money. But there's a couple of things you could do to protect that. Number one you can kind of tell me about their vehicle. Do they have like a van? Does it look like they're doing work? It's a little like they, you know they they stay busy. Or if you call them, are you like, are they blowing you up for the next few days? Because you're like the only job that they have, because they want to do such terrible work. And number two they're they're phony, you know, and they have their kind, the kind of busy. That's good, that's a good thing. So that's one thing Then. Number two is that you are going to pay them in portions as well. So that's one thing is check up on your work. That's why doing it in your backyard is really important, or that's why having an agent that knows how to flip properties is really important, so you can check up on it. And then there's all the other things. You can ask for referrals Maybe they have a website but for but for you know some you know like contractors that I hire, you know gonzalez's painting is one of those guys.
Brandon Harris:You know they don't necessarily have like a website, kind of facebook page. They don't really. You know they don't. They're not really good with all the online stuff, which is fine, they're great crew, um. So with them, like when I first started working with them, they had a vehicle already. At least they have it, like they have all in it. They have their crew that come make it, tell they're knowledgeable, um. But the biggest thing is like, once they get started, I'm gonna go monitor that work, especially the first house. I'm only gonna pay them in portions got it, got it okay.
Joseph Marohn:So let's let's dive a little bit more into, like, the renovation costs, because I think this is where a lot of people get lost in the sauce. Because if you don't have any experience with flipping, how are you, how are you going to have any idea what should and what shouldn't be replaced, or even the cost of labor and material? Right, you know, like, how do you even figure out what the cost per square foot in your local market is, and is it priced differently for lipstick work versus light repair and full good jobs, or is it all kind of like the standard of the average cost?
Brandon Harris:I mean, you know a lot of these guys. They're going to give you some formula where it's like twenty dollars per square foot for a lipstick job, twenty five dollars per square foot, you know, and you you could try to. That can put you in a range Like that's the biggest thing, I would say. Is it like? Gets you into a range at least where you know where you kind of need to be at and then you can renegotiate if needed. Um, so sure, like lipstick job, $20 per square foot.
Brandon Harris:They say, um, for me, like I have each individual thing priced out now. So like I know exactly per square foot. Like, for instance, lvp, it's installed on per square foot basis. Um, the painting I do on per square foot basis. Um, popcorn removal per square foot. You know, cabinet stuff, like I have that all. I have a price sheet. Like I have, I have it literally in an excel sheet, google sheet, I have everything priced out and I, you know everything I've paid someone in the past to all my other contractors. I record everything of what I paid anyone and how much all that stuff. So there's that.
Brandon Harris:But again, if you're brand new and never done any of this, what I would say is ideally. When you go to to, let's say you're just going to do a walkthrough in the house, what I would do is I would try to bring two different contractors with you so you can get an idea of the price now afterward. That's. That's going to tell you the most it's going to cost because you have that quote already. It's not, obviously it could be things that go wrong, but you could have at least that quote. And yes, you can get contracts and we do use contracts too. Absolutely luckily, I haven't had to go into issue with that yet. Probably should have done the first guy, but we worked out something else. But, um, but yes, you can have contracts.
Brandon Harris:But when you go look at the house, say you're looking at wholesalers, let's say you need to go there in person to look at it, and you do that first. Bring the contractors with you, have them two contractors come with you so you can start to get that priced out. I can't like the safest way to go about us because obviously you want to be careful on, especially in your first flip is that the best way is going to is going to have actual quotes coming in from your contractors, people who actually because you're not going to learn all this, you're not going to be able to price out everything unless you get it. Just it's partner with someone again, that's why I recommend partnering.
Brandon Harris:But if you're not going to partner with someone, you refuse to partner with someone. You either got to get, have someone who's willing to, you know, find a mastermind who shares you the price sheet. That's still going to be kind of hard to really price out everything. Trust me, I had that too. It's still hard, trust me. The best way to do it is to get multiple quotes from contractors.
Joseph Marohn:Okay, and now? Would you recommend a new fix and flipper, start off with light rehab? Or do you think they're good to go to just dive in on a full gut job for their first flip?
Brandon Harris:Don't do a full gut job. Don't do a full gut job. I have some people tell me there's this one guy who's writing this story and he was talking about, you know, doing historic, a historic house for his first one.
Brandon Harris:You get a grant and all this kind of stuff. And I'm like, dude, you're crazy, like you want to go through all that in your first. That's, that's insanity. Oh, you can make this much money. I'm like I mean sure, I mean go for it. Like I'm not gonna tell you no, because, who knows, maybe maybe he'll be teaching me about historic houses. I don't, I don't know, but for me I just doesn't. I don't want anything to do with that. Like, for me, especially when I'm doing my first ones, I want the easiest, least amount of work as possible to learn first. And so, yeah, if you can get a house that minimum like if your quotes are coming in like over $50,000, then I would say that's kind of getting into more extensive renovation. I don't know the size of the house, but the general concept is do cosmetic.
Joseph Marohn:Yeah, I agree with you there, man, because you know, if you're going to start with a flip, I would highly recommend you start off with light rehab or some lipstick work, kind of get a feel for it, right, you know, learn how to get the blueprint down and then, yeah, sure, Once you start getting better and better at it, more consistent, then maybe you tackle on a full gut job I mean once you have your team in place, right. But I just wanted to point that out because I do see a lot of people make that mistake and it gives fixing flippers a bad name because all of a sudden this guy does this full gut job. He loses his ass on the deal and then he's like, oh, fix and flip is terrible now. So, like, when you're underwriting these deals, like, what other costs are we factoring in? Are like, are we adding in holding and and closing costs too? Or like, how are you?
Brandon Harris:yeah, I mean, in a short um format of video like this, it's gonna be hard to really get everything you need. The more important thing that I would say again, if you're gonna take from this, is getting quotes from people who know what they're doing, partnering with people. But yeah, if you're gonna underwrite a deal, those are the main parts. Okay, first of all, it's when you buy the deal. Notice these off-market things. You're promising to pay for the closing costs, so you gotta and then there's usually not an agent involved, especially off market. So it's really closing costs. Maybe a transfer tax, the attorney fees, that kind of stuff be a few thousand dollars. And then you're going to have I use hard money or private money a lot of times. So you're going to have your origination points like one or 2%. If you're paying more than 2% and you've lost your mind, I don't care what the person's trying to tell you. The hard money is trying to tell you hey, you know, but we have the best customer service there is out there and we can fund 90%. Dude, you can go to Kiyavi. Here's Kiyavi. It took me a while to find them, just from the office. Kiyavi is the best.
Brandon Harris:I've talked to a lot of hard money lenders. Kiyavi has it all out. When I talk to other people, they always just go. When they hear I'm with Kiyavi, they're oh, we have great customer service. I'm like, okay, well, I care about how much you're going to charge me for my loan, that's what I care about. Kiyavi's customer service is perfectly fine. I don't care about the customer service I do. Kiyavi's is like if it's horrible, that's a different story. Kiyavi's is great. How much you're going to charge me for your money, that's what I care about. And so I you factor in that. You factor in you know the origination points and this you know fees. They charge you up front. I've heard about people doing like 4% origination. I like, how do they make money on these deals? I want to be a lender charging 4%, that's crazy. But I pay like less than 1% now, um and then.
Brandon Harris:So that's factoring the first one. And then in your cost. It depends if you're going to get. You can go and get the the renovation costs loan lent to you too, or in some cases we just fund our renovation ourselves. So it depends on how you do that. But then you have your interest. So these are interest only loans. So either they collect at the end of closing or monthly payment depends if you want to just pay it monthly and pay a little less, whatever. That's what we do. So you have that monthly payment and then.
Brandon Harris:So now you have closing costs, the hard money, upfront fees. That's in the beginning. In the middle you may have renovation costs if you're funding it yourself or if you have that loaned into it. You don't have any of those costs, but you have your loan monthly cost, the interest, the interest only costs. And then when you sell the house, you got to pay the closing costs and the selling side, which is going to be more expensive because you're going to want to pay a buyer's agent. Around me it's 2.4%, so I pay market price because I want them to bring their buyers Very important. You pay that and then, no matter what they're doing with changing laws pay buyers, agents and then you're gonna have to pay off. Um, there may be some more fees, the loan when you pay it off, not that much, it's just, like you know, servicing fee fifty dollars, whatever, or whatever the end is for that month. Then your closing costs, the other closing costs like the attorney fees and that stuff, and that's it okay.
Joseph Marohn:So and then, how are you funding your own deals, like, how are you getting the lending on this, or do you use private money lenders, hard money lenders? I do it all um.
Brandon Harris:So, number one I never fund my an entire deal unless I have a couple deals that I just would sell real quick. Because someone told me this concept and it just resonated, just made a lot of sense. Um, they like told me. They're like, I'm like so, but you have so much money, why aren't you just buying this deal yourself, you don't? I think I was a wholesaler trying to argue like dude, why would you need a loan for this? Like you don't have to factor in loan costs, pay me that money and just you can fund it yourself. Um, but no logic. And they're like. They're like no, I, it's like doesn't matter, I always use other people's money because sure I can go out.
Brandon Harris:Let's say I have enough money $200,000. Let's say I can go buy a house for $150,000 and fund the renovation $200,000. There it goes. Well, you can buy that one house. Let's say, from that you'd make $70,000 instead of paying the lender and all the other costs, $20,000. So instead of making $50,000, you can make $70,000. But what if you took that $200,000 and instead you bought three houses with it, four houses with it? Well, now you're making $50,000 on three or four houses. So that's making $150,000 compared to $70,000. So I always use private money or hard money, um, and then I'll sometimes pay my own renovation costs and that depends how many deals, how much deal flow I have coming in. If I have the money sitting there and I could pay for the renovation, I will, um. But so I'm only paying that 10 because they usually they fund it like loan value or loan cost, and so I'll pay 10% for the house.
Joseph Marohn:Yeah, I think if you have the money to do it, by all means right, you can do that. But if you really want to scale and get to a higher level where you're doing multiple deals a month, you really have to learn how to start leveraging private money and using lenders right, because that's just going to allow you to get access to a lot more funding, a lot more deals, a lot more opportunities and you can really scale your business. So you trying to fund your own deal, it's like, yeah, you could, but hey, man, we're trying to get to a higher level, let's start using lenders and private money and all that good stuff. So, yeah, that's why I just want to ask you on that, because I've heard from other flippers where they say, no, I just use my own money and they're like oh, how many deals are you doing?
Joseph Marohn:Like, oh, I did two a year, right, so you know. Like, if you really want to scale it where you're doing like multiple, you know, I don't, I don't know how many are you really doing. Like, are you doing multiple year, multiple month? Like, what's your scalability?
Brandon Harris:like, yeah, well, I do want to say that's a good point. It always depends on who you're talking to. I mean, if you're just going to do one flip and you have a lot of extra cash and you like be safe, and it's like, let's say, you think the economy can go the opposite way in a few months and you're like I want to be able to just own this house, sure, whatever, that's not me, I'm trying to scale it up. But so this year the goal was to finish off at 24 um. So about two a month was that. Because you know, last year I've only done this for like two and a half years now. Last year we did um 14 houses and so this year was to do 24 um and I'm going to finish off somewhere, like, hopefully I get it. We'll see how the end of the year changes. We just picked up a good amount of contracts, but most likely you're not going to sell. I'll probably land around like 22, 21.
Joseph Marohn:Oh, wow, that's impressive, man. Good for you. Appreciate it. Yeah, so, uh, you know, I I really want to be, you know, respectful of your time. There's so much that we can cover on this. Like you said, we can't cover everything there is with fixing flipping in one hour. So what I like to do is I like to do a part two with you and bring you back in and we'll cover it, because I have so many, a lot more questions. I know a lot of people are thinking right now and if you're up for that, let's, let's do a part two and let's touch more on this, if you're up for that, yeah, absolutely, okay, cool, so you know. There is one more question I want to ask you before we close it out Now are there any cons to house flipping that you can think of, or maybe some things new investors should consider before doing their first flip?
Brandon Harris:Yeah, absolutely. I mean there's always risk involved with it. I mean you understand that it's the housing market isn't guaranteed risk involved with it. I mean you understand that it's the housing market isn't guaranteed like arv. Like it's so funny people's opinions on appraisals, people who aren't really like, like investors and stuff, but they think appraisals are what their house is worth. The appraiser does not determine what your house is worth.
Brandon Harris:Sorry I told you that the equity thing you see on your bank statement is not. The bank does not determine exactly what your house is worth. The market determines what your health is, what your house is worth, absolutely. That's the part that's like. It can be volatile because you know your house can be worth this much and then the next day people are not willing to pay that. A lot more houses enter the market.
Brandon Harris:Or, uh, elections your elections are around. People are scared of what direction it's going to go. Or the interest rates, because you're changing the interest rates. So people, you know there's some like or covid could hit and all of a sudden everyone is working from home and they need extra space in their house and everyone decides they need to move um like. Or they're working from home and they don't have to go in the office anymore, except that they decide they could like.
Brandon Harris:There's all these factors that could impact the market and so, luckily for me, you know I've been in a good market the past few years, but you know, obviously there was that risk of it the market turning around. You probably talk, people have been in bad markets and it wasn't that great. So there's definitely some safety measures, though you know, being well funded, having cash ready to. You know, if you need to lose money in a deal worst case scenario, if something happens that you're able to do that, bringing in partners using that people's money there's different ways to safeguard that, but yeah, it's definitely you know, having an experience being an underwrite. So, going all the way back to the beginning, what I would say is, in order to help hedge against these things, is you have to understand on how to underwrite these houses. You have to understand what you're buying. You have to understand, like how okay, you have to be able to predict, ideally to a close amount, how much it's going to cost. Maybe go tour houses that new western has off market and bring contractors with you and sort of get an idea of how to price things. But underwrite, understand how to underwrite the house and then understand how to buy a house based on your underwriting. You need, you should your your your formula. Like I put this onto an Excel sheet it should tell you what your max allowable offer is and never go over that, never become, never get emotionally attached to a house. Um, that's actually an important thing because it's like that does happen. Like you may see, it's in an area where you're like dude I grew up in this area, my street is right down there like I just need this house and you're trying to force yourself to pay more than you should be paying. Um, I've done that before and it's it's not a good thing to do. So you got to detach yourself emotionally from the purchase and just understand how to negotiate and be willing to pass up on houses.
Brandon Harris:Don't get sucked into the. Well, I have a buyer and he's going to pay this much. Don't get sucked into that. That triggers you. You know it triggers. You say, oh okay, I'll just do this. Don't get sucked into that. Stick to your numbers that are on your sheet. If your sheet and you've done your due diligence and your sheet tells you the most you can offer in the house is 200K, then start off wherever you're gonna start off. Let's say you start off with 180, whatever. If they say, oh, I got a buyer and he's at 210, I need 215, sure, and do not go over what your sheet is telling you you can pay.
Joseph Marohn:Man, yeah, that's some good points right there, and I wanted to point that out because I don't want it to make it seem like, hey, brandon's crushing it, he's making it look easy. I'm going to go out and do a flip right now. Yeah, take action, but just be aware that there are a lot of risks involved with fixing flip. But if you understand the, yeah, take action, but just be aware that there are a lot of risk involved with fix and flip. But if you understand the business, you understand the blueprint on what to do. Or, like you mentioned, you know partnering up with someone that's already in the business doing flips and really learning it before you just go head first. That's that I would say. That's the proper way of doing it. You know doing proper due diligence and if you do all these things and you apply all that, then your success rate is going to be a lot higher, right, and you're not going to have that much failure. So I do want to point that out. So good point on that. And then you know you did touch on the beginning of the podcast. You were talking about how you were a wholesaler and you were looking at when you, when you wholesaled it to that, that that end buyer, which typically is a fix and flipper and you got curious right and you saw the number, you know what you got on the assignment. But then you saw what he made on the back end and you're like shit man, like I, that could have been me. And that's pretty much where I'm currently at right now, because I run a wholesale team and you know I, you know I get the assignment fee or whatnot. And then I always get curious myself and I look at it and I'm like damn, like this dude made a killing. So I'm at that point now where you were back in when you first got into this transition.
Joseph Marohn:So, with that being said, you know I have we me and Brandon have talked about this and I said hey, man, I want to partner with you on a deal. I'm going to bring a deal your way. I want to learn from you, you know. So let's partner up, let's do a fix and flip together. I know you're not in my market, but I can bring the deal that's from my market. We partner up together and let's collab and and we'll figure out how we split that. But that's what I'm currently doing. So we're going to be partnering up on a deal on a fix and flip here soon and I'll make sure that I share that entire experience with you guys so you can learn from what I learned on my journey, because I'm exactly where you were at. So just wanted to point that out.
Brandon Harris:Yeah, can't wait.
Joseph Marohn:Yeah, so well, like I said, we'll do a part two. We'll bring you back in because there's still a lot more to touch on this. But I just want to say, brandon, you're a beast man, you know, you're taking action, you continue to grow and provide value to people and I'm honored to have you as a homie in my circle man. So I appreciate you and keep doing what you're doing, and I'll be seeing you in Boston, here in a few days, dude, I can't wait. I'm so excited. So am I man, so cool? So, brandon, how can people get ahold of you if they want to bring some deals your way?
Brandon Harris:My cell phone number is 9196. You have like something you can throw?
Joseph Marohn:it not? I'll make sure we throw it up there, but just go ahead and say it out 919-621-8431.
Brandon Harris:It's going to be right there. If you want to do that, I was going to put it. Uh, that's my cell phone and then he's gonna throw my instagram up to brandon harris three underscore message text me whatever you want. Yeah, what I love about these, these conversations and putting yourself out there and going to things and joining groups like owners club is you never know who you're going to meet. You never know who is going to become a part of your life and, luckily for me, joseph has been one of those guys. So definitely feel free. Feel free to contact me, reach out, because I'm excited to see who I meet in the next stages of my life.
Joseph Marohn:Facts man. I couldn't agree with you more there, so I appreciate you. But now, if you guys are finding value from this podcast, don't forget to show your boy some love. If you like what we're bringing you, don't forget to subscribe. It helps us continue providing value to others by reaching a broader audience. We're out here to serve, learn together and reach as many people as possible, so be much appreciated. Make sure to also smash that like button and drop a comment down below where your market is that you're going to choose for your next flip. Appreciate all the continued support and, guys, stay tuned, because we're pumping these episodes out every two weeks. I got some awesome topics and guests coming up next that will change the entire way you do business. You definitely don't want to miss out. Best believe I'm a key. Bring you that fire Peace. Thanks, brandon. Thanks for watching.